Thanks for your question.
These words literally mean: “The hand of Allah is tied up”. It is just a small portion of the verse 5:64 that talks about the Jews making fun of God.
Please read through these three Commentaries of the Holy Qur’an for further explanations.
Sorry, it is quite a long read.
1) [Pooya/Ali Commentary 5:64]
It is reported that when the Muslims had to raise funds for their defence, the Jews made fun of the Muslims by saying that their God had become close-fisted. In fact they themselves were niggardly. They habitually uttered blasphemies. Allah, the almighty, is as generous as ever. He spends according to His infinite wisdom and universal plans. (Refer to the commentary of rahmanir rahim and rabba alamin in surah al Fatihah). The Muslims willingly contributed to the defence fund to show their spirit of sacrifice in the way of Allah, who, through such circumstances, tests their faith in Him.
The revelations revealed to the Holy Prophet increased their (the Jews) rebellion and unbelief. They availed every opportunity to kindle the fire of war against the Muslims, but on all occasions it was extinguished by Allah either by raising feuds and quarrels among themselves, or by granting victory to the Muslims, yet secretly and stealthily, often very cunningly, they strived to spread corruption in the land.
2) Allamah Tabataba’i, Al-Mizan, vol. 11, Commentary of verses 57-66
The verses forbid taking those who make mockery of Allãh and His communications as friends from among the People of the Book and unbelievers, and enumerate some of their evil characteristics including their breaking the covenants of Allãh and so on – the matters related to the theme of this chapter, i.e. exhorting people to keep their promises and covenants and showing the demerit of going against promises, etc.
All the verses seem to be revealed in one context, although possibly some of them could have particular reason of revelation.
And the Jews say: "The hand of Allãh is tied up!" Their hands shall be shackled and they shall be cursed for what they say. Nay, both His hands are spread out, He expands as He pleases.(5:64)
The Jews did not agree that the laws of religion could be abrogated, and, for this reason, they did not accept that Tawrãt could be abrogated; rather they rebuked the Muslims for abrogation of some of their laws. Similarly, they did not accept the doctrine of al-badã’ (اَلْبَدَاء) in matters of creation, as is seen from various Qur’ãnic verses. We have elaborated this topic in the first volume of this book, under the verse: What-ever signs We abrogate or cause to be forgotten, We bring one better than it or like it, . . . (2:106). Some light has been thrown on it in other places too.
The verse: "And the Jews say: 'The hand of Allãh is tied up!' " might be referring to their above-mentioned views; however, the fol-lowing clause in their rebuttal: "Nay both His hands are spread out, He expends as He pleases", does not leave room for such interpretation. It rather shows that they had uttered these sinful words particularly with reference to sustenance: Either they had said it especially about the believers, because generally they were afflicted with poverty and their condition was straitened. So, they talked in this way as a mockery against Allãh, alluding that He does not have power to give riches to His believing servants nor can He rescue them from need and humiliation. But this opinion is not worthy of consideration, because the verse is in the chapter of "The Table", which was revealed [in the last years of the Prophet's life] when the Muslims enjoyed abundance of livelihood and lived a pleasant and luxurious life.
Or, they said it because of the famine and draught, which had made their lives miserable, disturbed their economic system, and lowered their standard of living, as appears from some of the traditions that explain the reason of revelation. But this explanation too does not agree with the context of the verses, because evidently the verses expose their various characteristics like their enmity and treachery against the Muslims whom they hated to the extreme. These verses do not allude to the sinful talks they had uttered regarding their own selves.
Or, they said it when they heard the Qur’ãnic verses, e.g.: Who is it that will lend to Allãh a goodly loan (73:20). So they said: "The hand of Allãh is tied up! He is not able to obtain the necessary funds to spend in His requirements for propagating His religion and reviving His mission." They had said it as a mockery and a jest against Allãh, as appears from some other traditions relating to the cause of revelation. This explanation appears nearer to reality.
In any case, this ascription – that the hand of Allãh was tied up and He was over-powered in His plans, when some adverse situation had developed – does not go against their religious teachings nor is it alien to the descriptions and comments found in the present Tawrãt. According to Tawrãt, there were many things which Allãh was unable to do and which prevented Him from enforcing His will time and again, as strong persons hinder weaker ones in their activities. You may look at the stories of the prophets, like Adam and others as they appear in Tawrãt.
So, many aspects of their belief allow them to ascribe to Allãh what is totally against the sanctity of His status, although in the present context they had uttered these words as a jest and mockery – we know that every action of a man emanates from some aspects of belief which he holds and which encourages him to do it.
"Their hands shall be shackled and they shall be cursed for what they say": It is an invocation of evil against them, of the same type which they had ascribed to Allãh, and which went so clearly against His sanctity and sacredness – their declaration that Allãh's hand was tied up and He has no power to do what he pleases. Accordingly, the clause: "and they shall be cursed for what they say", is in explanatory conjunction with the clause: "Their hands shall be shackled", in as much as their hands being shackled displays the divine curse on them, because Allãh's speech is His action, and He curses someone only through penalizing him with punishment either in this world or the next. Thus, this curse means a punishment equal to shackling of their hands or more total and comprehensive.
Someone has opined that: "Their hands shall be shackled", is [not a curse, but] a statement showing that they have already been inflicted with chastisement because of their arrogance against Allãh in saying: "The hand of Allãh is tied up!" But the former interpretation is more understandable.
"Nay, both His hands are spread out, He expends as He pleases": It is the rebuttal of their claim: "The hand of Allãh is tied up!"
The sentence: "both His hands are spread out", is an allusion to His all-encompassing firmly rooted power; and such usage is very common.
Allãh has said: "both His hands" (although the Jews had used singular in their talk, "The hand of Allãh is tied up!") in order to show His complete and perfect power; as is the case in the verse: He said: "O Iblīs! What prevented thee that thou shouldst do obeisance to him whom I created with My two hands? Art thou proud or art thou of the exalted ones?" (38:75), as it indicates or rather clearly shows the use of perfect power in Adam's creation; or as they say: 'You do not have two hands on her, to emphasize absence of every power and every favour.'
The dictionaries often give various meanings for 'hand' other than the body organ, like power, strength, favour, ownership and so on. However, the fact remains that word was originally coined for the said organ, and it is used in other meanings as allusion, because all other meanings have some affinity with various aspects of the hand, e.g. magnanimity and spending is related to it in its management and raising up or putting down.
Therefore, when the Book or Sunnah ascribes hand to Allãh, its connotation changes with the context. For example, in the clauses: "both His hands are spread out [5:64]"; and: whom I created with My two hands (38:75), "hands" means power and its perfection; and in the clauses:… in Thine hand is the good . . . (3:26); Therefore glory be to Him in Whose hand is the Kingdom of everything . . . (36:83); Blessed is He in Whose hand is the Kingdom, . . . (67:1) and other such verses, "hand" means kingdom and authority; likewise, in the verse: . . . Be not forward in the presence of Allãh and His Messenger . . . (49:1) the phrase means 'in the presence of' as translated above. "He expends as He pleases": It elaborates the clause: "both His hands are spread out".
3) An Enlightening Commentary into the Light of the Holy Qur'an vol. 4
وَقَالَتِ الْيَهُودُ يَدُ اللّهِ مَغْلُولَةٌ غُلَّتْ أَيْدِيهِمْ وَلُعِنُواْ بِمَا قَالُواْ بَلْ يَدَاهُ مَبْسُوطَتَانِ يُنفِقُ كَيْفَ يَشَاء وَلَيَزِيدَنَّ كَثِيراً مِّنْهُم مَّا أُنزِلَ إِلَيْكَ مِن رَّبِّكَ طُغْيَانًا وَكُفْرًا وَأَلْقَيْنَا بَيْنَهُمُ الْعَدَاوَةَ وَالْبَغْضَاء إِلَى يَوْمِ الْقِيَامَةِ كُلَّمَا أَوْقَدُواْ نَارًا لِّلْحَرْبِ أَطْفَأَهَا اللّهُ وَيَسْعَوْنَ فِي الأَرْضِ فَسَادًا وَاللّهُ لاَ يُحِبُّ الْمُفْسِدِينَ
64. "And the Jews have said: The hand of Allah is tied up! and cursed be they for what they have said. Nay, both His hands (of Power) are (always) spread out. He bestows as He pleases. And what has been sent down to you from your Lord will certainly increase many of them in insolence and infidelity; and We have cast enmity and hatred between them till the Day of Resurrection. Every time they kindle a fire for war, Allah extinguishes it. They strive to make mischief in the land; and Allah does not love the mischief makers.
One of the clear examples of the vain statements and sinful words of the Jews, which were generally referred to in the previous verse, has been pointed out in this verse.
Its explanation is that history shows that once the Jews were living in a very powerful state. They were ruling over a vast part of the inhabited world of that era, of which the time of David and Solomon, son of David, can be mentioned as an example. In the time after that, too, their authority continued to be exposed with some changes, of course.
But, with the advent of Islam, the light of the star of their power declined especially in Mecca and Medina.
The Prophet's fights against the Jewish tribes known as Bani-Nadir, Bani-Ghurah, and the Jews of Kheybar caused them to become very weak. At this time, considering their past glory, authority and power, some of them mockingly said that Allah's hand was tied up with chains and would not give them anything.
Since the rest of them (those Jewish people) were content with, them, too; the Qur'an has attributed this qualification to all of them, by saying:
"And the Jews have said: (The hand of Allah is tied up! ..."
In answer to them, and in order to blame and reproach such a wrong belief, at first, Allah says:
"...Be their hands tied up! and cursed be they for what they have said....."
Then, to nullify this unjust opinion, the Qur'an says:
"....Nay, both His hands (of Power) are (always) spread out. He bestows as He pleases. ..."
Allah is neither forced in His affairs, nor is He obliged to the natural phenomena or the momentum of time; but His Will is above everything and effective in all affairs.
Then, it implies that even these verses, that make the secret of their statements and opinions manifest, instead of having a positive effect on them and turning them back from the wrong path, cause many of them to become rather stubborn and also to increase their rebelliousness and faithlessness. The verse says:
"...And what has been sent down to you from your Lord will certainly increase many of them in insolence and infidelity....."
But, for these unjust statements and opinions, that they utter and the obstinacy that they have in the way of disobedience and disbelief, Allah has assigned a heavy chastisement for them in this world. He (s.w.t.) in this verse says:
"...and We have cast enmity and hatred between them till the Day of Resurrection. ..."
And, by the last part of the verse, the Qur'an points to the struggles and efforts of the Jews for kindling the flames of war. It also points to the struggles and efforts of the Jews for kindling the flames of war. It also points to the grace of Allah in protecting and rescuing the Muslims from these annihilating flames, where it says:
"….Every time they kindle a fire for war, Allah extinguishes it…"
And, in fact, this divine incident is one of miraculous aspects of the life of the Prophet (S).
Then, the Qur'an continues saying:
"...They strive to make mischief in the land; and Allah does not love the mischief makers."